U.S. may lose clout at IMF due to refusal to OK reform: Lew

March 12, 2014|Reuters

(Gary Cameron Reuters, )

WASHINGTON (Reuters) - The United States is hearing that its refusal to approve previously negotiated reforms for the International Monetary Fund could reduce the nation's influence at the institution, Treasury Secretary Jack Lew said on Wednesday.

U.S. lawmakers have been reticent to approve the IMF quota reforms that were agreed to in 2010 and would give developing countries a bigger say at the international lender.

The reforms would not reduce Washington's power at the IMF, where the United States is the sole country with veto power.

The Obama administration hoped Congress would tack approval of the IMF quota reforms onto legislation for an aid package for crisis-stricken Ukraine, but the outlook for that happening remains uncertain.

Lew did not provide details on what consequences Washington could face, but sources told Reuters last week that Russian officials are pushing for the IMF to move ahead with planned reforms without the United States, which could mean the loss of Washington's veto over major decisions at the global lender.

"We're already hearing calls by some to say if the United States doesn't approve (the IMF) reforms, we should maybe move on without them," Lew told a Senate committee. "That's not a good place for the United States to be."

Lew said approving the reforms was also necessary for effective IMF support of Ukraine.